Unable to muster 60 votes to cut off debate, Senate Democrats today tabled their efforts to enact a comprehensive immigration reform bill, including provisions that would have raised the cap on H1-B visas from the current 65,000 to 115,000.

A favorite of the technology industry, H1-B visas allow U.S. companies to sponsor foreign born U.S. graduates in science, engineering and math for up to six years of U.S. employment. Tech executives and lobbyists insist an increase in H1-B visas is necessary to fill what it claims is a chronic shortfall in American IT talent.

"We have been supportive of the Senate process on immigration reform, and are therefore disappointed in today's vote," Compete America, a coalition of high tech companies, said in said in an e-mail statement to internetnews.com.

Pamela Passman, Microsoft's vice president for global corporate affairs, said the company was disappointed in the Senate vote.

"The nation continues to witness a dramatic decline in the number of native born computer science graduates," Passman said in a statement sent to internetnews.com. "Technology companies like Microsoft rely on the H-1B visa and employment-based green card programs to deliver an adequate supply of highly qualified employees to help maintain our competitive position."

Passman added, "It is our hope that the Congress will prioritize finding a solution to these urgent issues before the end of the year."

Although the U.S. House has yet to take up the immigration issue, the Senate failure to move the legislation forward is widely considered to be the death knell for immigration reform in the 110th Congress.

It might not, however, be the end of the tech push to increase the H1-B visa cap.

"The challenges we face to remain an innovation leader require us to press on and seek other legislative vehicles to fix an outdated visa system for highly educated foreign professionals," Compete America said in its statement.

Robert Hoffman, vice president for government and public affairs at Oracle and co-chair of Compete America, told internetnews.com it was still possible to create a cap increase by creating a "carve out" in another bill.

"The kinds of things we are proposing are for skilled workers," Hoffman said. "Unfortunately, other controversial issues that bring out the passions in people dominated the debate."

As the Senate struggled with the more controversial measures of immigration reform like amnesty and border security, high profile tech executives quietly worked the Senate throughout the spring to urge lawmakers to include an increase in H1-B visas in the legislation. Microsoft Chairman Bill Gates even told the Senate the H1-B visa cap should be entirely eliminated.

Google stumped for the increase by highlighting the fact that its co-founder Sergey Brin and the company's principal scientist, Krishna Bharat, are both U.S. educated and foreign-born.

From the tech industry's perspective, the need for a cap increase was underscored in April when the 2008 allotment of 85,000 H1-B visas were all allotted in a single day. The 2007 allotment took a month to exhaust the supply.

Although Hoffman stressed a cap increase is "widely non-partisan," there are opponents in Congress, as Compete America learned in the Senate debate.

U.S. Senators Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.) introduced legislation earlier this year to overhaul the entire program to give American workers priority over H1-B visa workers and crack down on employers who misuse the visas, including paying the foreign workers salaries less than the U.S. prevailing rate.

"Our immigration policy should seek to complement our U.S. workforce, not replace it," Durbin said in a joint statement with Grassley. "Some employers have abused the H-1B [program]... to bypass qualified American job applicants. This bill will set up safeguards for American workers."

The legislation would require all employers seeking to hire an H1-B worker to certify they have made a good faith effort to hire American workers first and that the H1-B visa holder would not displace an American worker. Under the bill, employers must first advertise the job opening for 30 days on a Department of Labor Web site before applying for H1-B workers.

Even of Grassley and Durbin's concerns can be dealt with, the price for a cap increase may still come high for tech.

Over the strenuous objections of the tech lobby, Sen. Bernie Sanders (I-Vt.) amended the now dormant immigration bill to increase H1-B visa fees for employers to $5,000 per application, $3,500 more than the current fee. Proceeds from the fee hike would be used to fund scholarships for Americans seeking degrees in math, technology and health-related fields. The Senate approved the amendment, 59-35.

Sanders said the fees raised could fund 65,000 scholarships of $15,000 each to American students. Sanders originally sought a fee of $10,000 per application.

"What many of us have come to understand is that these H-1B visas are not being used to supplement the American workforce where we have shortages but, rather, H1-B visas are being used to replace American workers with lower cost foreign workers," Sanders said during the floor debate on the amendment.

Compete America, which includes Microsoft and Intel as members of its coalition of corporations, educators and trade groups pushing for an increase in H1-B visas, called the Sanders amendment an "outrageous and onerous tax" on tech.